In the good books
Credit Corp Group (CCP) was upgraded to Add from Hold by Morgans. B/H/S – 2/0/0. Morgans does not believe there are any legitimate concerns raised from the recent anonymous report published on Credit Corp. The broker suggests, despite the attempt to damage the company's reputation, it is unlikely the risk of access to funding has increased. If mainstream banks decide not to lend the funds then alternative, albeit more expensive, funding options would be available. The broker believes fundamentals are solid and the three-year growth profile attractive.
In the not-so-good books
Domino’s Pizza (DMP) was downgraded to Hold from Add by Morgans. B/H/S – 3/4/1. The stock has rallied 15% over the past month and is now trading above Morgans' valuation so the rating is downgraded to Hold from Add. In the medium term the broker believes the company is capable of delivering around 15% net profit growth. In the short term the broker continues to believe that hitting 20% net profit growth in FY18 is a tall order, although any miss is likely to be modest. Target is steady at $51.51
Metcash (MTS) was downgraded to Sell from Hold by Deutsche Bank. B/H/S – 3/1/3. On further evaluation of the results Deutsche Bank believes the risks are still to the downside and the cost reductions are no longer sufficient to hold earnings flat. The usual challenges will also be compounded by the loss of the Drakes contract, while there remains some risk other large retailers may follow. Target is reduced to $2.50 from $2.80.